In general, translation exposure is larger with MNCs that have a larger proportion of earnings generated by foreign subsidiaries.

Question

Quizplus · Accepted Answer

Translation exposure refers to the risk faced by a company due to fluctuations in exchange rates when translating foreign subsidiary earnings into the company's reporting currency. Therefore, as the proportion of foreign subsidiary earnings increases in a multinational corporation's total earnings, so does the translation exposure.

In General, Translation Exposure Is Larger with MNCs That Have